Stop playing with fire!

Against the advice of the Iranian Money and Credit Council, President Ahmadinejad has decided to reduce the interest rate. While further details are not yet available, but it seems likely that the rate would fall by another 2%. It should be said that this further reduction is happening against rising inflation rate. That in turn, would imply that the real rate of interest would move further into negative. There would be a number of implications:
- The saving rate is likely to fall further.
- If saving and depositing in a bank is not rewarding enough, this is likely to fuel transactions in real estate and lands. Hence further rises in the price of houses are most likely. An already critical situation would become more critical.
- It would also encourage capital flight, i.e. those who have surplus money would decide to take their money out of the economy altogether.
- On the positive side, however, borrowing becomes more attractive. Some argue that this could encourage investment in the economy. I do not share this view. I think that the main underlying reason for insufficient investment in the economy, is high political risk and that is unlikely to be changed be this fall.
In short, this playing with fire, while causing damages to the supply side of the credit market in Iran, is unlikely to encourage investment.
One can only hope and pray, that the fragile financial system of the IRI would not collape altogether.
My link does not work, you can read about Ahmadinejad's decision at:
http://www.farsnews.com/newstext.php?nn=8602050405

What a Presidential Visit!

Have a look at these pictures and guess what is going on!

They are certainly not criminals behind bars, they seem to be only women and children. Further, what is this army officer doing with this child? Is he pulling him out or pushing him trhough?

Does not really matter.These pictures have been taken during the President's recent trip to Fars, and these unfortunate people has come to say "welcome" to him. But they are not being treated very nicely, are they?

You might say, what do you expect, it is Iran. But, NO....NO.... I am an Iranian and I do not understand what the hell is going on there.

A sick humour!

Humour is a good thing, but bad humour is sickening. One would expect that "mature" individuals would not resort to sick humour. It seems however, some people no matter at what age, but they never mature. Read this and see the film attached to it. I wonder how many would fine this funny! Funny! you must be joking! It is sickening....

Virgina Tech Tragedy.

What a shocking tragedy! Being a university lecturere myself, I cannot find words to express my deep sadness of this huge loss of innocent lives. For obvious reasons, the TV news are dominated by this and I was just watching the Sky news. To my absolute amazement I learnt that on average 80 Americans a day die in the shooting incidences and yet, the majority of the American citizens seems to be against any effective gun control! It seems to me to be so strange and a strongly illogical position to take. Just pick up your pocket calculator and you will see that given this average number of daily death, 2400 per month, and 29200 Americans die per year . This is almost equal to 10 atrocities that bewildered the world on the 11 September 2003! How come that the American people and administration embarked upon a highly aggressive foreign policy in response to one 9/11 and seem to be doing almost nothing for nealy 10 such atrocities per year, every year! Undoubtedly the Constitutions should be respected, but is the law for the good of the great American poeple, or should the country suffer this enormous loss of life supposedly to protect this part of the Constitution?
Could you please help me to understand.

A lamp for your house, not for the local mosque....

In an unexpected move the Iranian President has ordered the release of British sailors. Whatever the underlying reasons, I am pleased that these young officers are released and can return to their families or to their posts. Let us hope that in similar situations, the political leaders would act in a similar fashion. The point that needs to be emphasised, however, is why Mr Ahmadinejad does not show a similar approach to many Iranian citizens who are improsined without any justifiable reason. The latest of these imprisoned citizens are the members of one million signitures campaign group who were arrested in the Laale park in Tehran. If one is to take this new move seriously, the President needs to be brave enough to tackle these issues too. Otherwise, it would be right to conclude that what he did, may have been a damage limitation exercise, rather than a manifestation of what he has claimed, " Islamic fairness". If this move is an indication of your "Islamic fairness", Mr President, as we say in Farsi, " a lamp fit for your house, should not be fitted in the local mosque".....Apply it to Iranian prisoners too.

No FT, No comment!!!

Just have a look at these pictures! These are some of the "Iranian university students" demonstrating outside the British Embassy in Tehran this morning!!

I say....the future is bright.... The Iranians are really keen to add to their " human capital"!